Five of the Ten Most Valuable U.S.-Listed Companies Are Hardware Businesses: Software Is Not the Whole Story—as of December 2024

Time to look at the ten largest U.S.-listed companies by market capitalization again. This time, let us take a different perspective. If we count Apple as a hardware company—which it is, given that hardware sales provide most of its revenue—then hardware companies in the broad sense, selling or manufacturing products, include Apple, NVIDIA, Tesla, TSMC, and Broadcom/AVGO: five in total. Software and internet companies—Microsoft, Amazon, Google, and Meta—account for four. Financial investment company Berkshire Hathaway accounts for one. “Software is eating the world” is the familiar view, and it is not wrong. But hardware also accounts for a substantial share, and its importance seems to have risen rapidly again over the past year or two. Taiwan’s global competitiveness and influence in hardware also seem far greater than in software. Three of the ten largest U.S.-listed companies by market capitalization are semiconductor-related. What about biotechnology? Eli Lilly happens to be eleventh. This does not mean biotechnology is unimportant; it should, in fact, be becoming increasingly important. But the industry does not experience sudden explosions in growth like software and semiconductors, nor does it seem to have the internet industry’s winner-take-all monopolistic characteristics. That, in turn, limits its market-capitalization performance. This should also be the period in U.S. stock-market history with the most companies valued above US$1 trillion: nine at present. Three are above US$3 trillion, two are above US$2 trillion, and four are above US$1 trillion.